Blizzard is quick to boast about their "over 11 million subscribers", but more than half of these subscribers are in China. And the Chinese servers have been down for a month now, with rumors circulating that they won't come back up anytime soon. So if Blizzard were to truthfully state how many subscribers they have right now, the number is down to somewhere around 5 million. But what is really happening is hard to make out, because everyone involved is keeping a lid on the news, total radio silence.

The best guess is that the story started by Blizzard transfering their WoW license in China from The9 to NetEase. Obviously The9 wasn't happy to lose this major earner, and filed several lawsuits. The new operator, NetEase, needs a license to run WoW. But the Chinese authorities didn't give NetEase a license, and "said that in order to protect the interests of domestic gaming enterprises, they would suspend review of all games belonging to foreign companies in the event of lawsuits or arbitration between foreign companies and Chinese companies". This could still go on for months!

Now financially this is less of a blow to Blizzard than it sounds. The Chinese players pay only about 6 cents per hour to play WoW, and most of that went to the Chinese operator, so in spite of China providing most of the players, it only provided a small part of the revenues and profits of Blizzard. Nevertheless the game being down for a month already certainly isn't good press, which is why Blizzard is keeping mum about it.

Imagine Blizzard ran into some regulatory trouble with the US or European authorities and the US or Euro servers would be down for a month! Obviously that would cause a major shift in MMO market shares. In China WoW isn't even the biggest MMO, but there is no doubt that the disguised protectionism of the Chinese authorities will have some effect. Not all 6 million Chinese WoW players will patiently wait until the issue is resolved. The longer it takes, the more of them will wander off to other games, and not necessarily come back when the servers are back up. This may hurt the pride of Blizzard more than their wallet, but there is no doubt that this is major bad news for them. Just don't expect a press release from Blizzard spelling out the truth and its consequences.
- posted by Tobold Stoutfoot @ 10:08 AM Permanent Link
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If I were Blizzard I'd say f*** you and move on. The Chinese (massive) nationalism, combined with their self delusion of greatness and inferiority complex really start to go on my nerves.

If they don't want a good product, let it be. Who cares about non-paying customers? Who even knows how much Blizzard had to pay just to get through the corruption?

Next, Blizzrd might have to censor the WoW chat. After all people might talk about stuff they shouldn't be talking about!!!And who knows what western infiltration techniques Blizzard uses to pollute the pure chinese minds! Didn't you think Illidan looked strangely similar to *add some chinese 'hero'*.Besides: You can kill dragons in Wow. Isn't the dragon a symbol of China?

But I understand, that investors dwant to be in China. It's just way to important at business meetings to be able to say: Of course we are expanding in China! Even if this costs you dearly and will never pay off.

Thanks for breaking this story Tobold, it's the first I've heard of it. Your blog really is a great place to get news in the online gaming world.

Just a side-note on WoW-a-likes, in any industry that has been around for awhile, a certain set of best practices or standards - such as tab targeting, a hotbar, etc - are friendly to the consumer and not at all a 'rip off' or unexpected for games in the same genre.

You can begin playing almost any FPS game and they will all have WSAD controls, a similar HUD, etc.

Have a look at this link if you are interested in China and the chinese mentality.(Unfortunately in English, since I only understand German and English) http://bbs.chinadaily.com.cn/viewthread.php?gid=&tid=631844

Thanks for the post, didn't know they were actually banning foreign games now.

The way I read it: the major mmorpg developers in China or the9 bribed their governement officials to ban all foreign mmorpgs. Profit! That or Blizzard forgot to pay their monthly bribes.

I wonder why any sane man would try to enter the Chinese market. I read that the expansion was delayed for months in China... to censor it. The already censored game by the9 could not pass the screenings:

The government has rejected two applications by the second expansion for The9's (Nasdaq:NCTY) licensed MMORPG World of Warcraft, "Wrath of the Lich King," since China's Spring Festival (January 25 - February 1), reports Sohu quoting unnamed sources. The applications were rejected due to content that didn't meet requirements, including a city raid and skeleton characters; the submitted version did not contain WLK's Death Knight first hero class, said the insider.

WoW game developer Blizzard Entertainment recently deleted a link on the game's North American site to the site's simplified Chinese version, said the report.

China is well known for their disregard for international laws and agreements. Is it that much of a surprise or issue that in a country where political dissent is dealt with torture, execution and sale of ones organs some trade rules are violated?

I hate how the most of the world at large couldn't care less when human rights are constantly suppressed with the most brutal methods but they act all hurt when google or some other company they hold in high regard is caught in the middle of that nightmare. Consistency FTW kill as many as you want but if you don't let them play my favorite game, listen to my favorite albums, use my search engine you suddenly become oppressors!

What is interesting is Blizzard keeping the lid on it and the way that stories like these can be kept quiet with a little help from your dictator friends.

I'm waiting to see all the Blizzard fanboys going nerd-rage on China as if they now found out it existed. Biggest problem I have with this is Blizzard hiding it like a good little conspirator instead of protesting it openly and vocally. Waiting for the problem to affect you is a human mistake often repeated but once it does affect you is it too much to ask to divert some of your cash to generating awareness?

I guess from a PR point of view being able to say 12 million subcribers is a big deal, 5 million is still massive but some uninformed members of the press would probably report it like it is a big deal.

This issue has it's genesis (I believe) in a spat between Electronic Arts and Activision Blizzard, which owns a 15.8% in former World of Warcraft operator The9. I covered the story at Gamesbrief in April.

What I hadn't realised was that The9 would be able to use the Chinese bureaucracy to stymie the transfer of the game to Netease. Looks like one of Activision Blizzard's lawyers messed up.

I didn't think this was really news. WoW got into China at just the right time, before China started restricting foreign MMOs from entering the market. I've said multiple times that no other western MMO maker could do what Blizzard has done because they couldn't get several million Chinese players mostly due to protectionism.

Still interesting, but not news if you've been paying attention, IMHO.

I started to write a lot about your comment, then I realized that the number of straw men you have in your text and the obviously stupid stuff (like I never said anything against human right violations. Excuse me? I even referenced these violeations in the comment).

What dictator friends are you talking about ??

When I say: Leave China, I mean it! There are a few things I like about China; especially that they manage to get their economy developed, something most once-poor countries don't manage to get done.

But they really need some freedeom of speech over there. The amount of absurd disinformation you encounter when you read Chinese blogs (in English - that's probably already the watered down version!), is .. breath taking.

The human rights violetions are WRONG and should be condemned!. But that doesn't mean that you shouldn't criticize anything else anymore.

The9 is obviously up to something, and as Nicholas suggests, it may very well have something to do with the switch to Netease. Not surprising that Blizzard isnt talking when this is obviously a legal issue for them occuring on foreign soil.

A number of hardcore raiding guilds in China moved over to Taiwanese servers in order to play Wrath (remember that the newest expansion hasn't even been released yet in China). If this becomes a protracted pause in service, I wouldn't be surprised if more committed players started rerolling on servers in other territories.

And no, this current legal drama won't effect the gold farming/powerleveling business in China as those services have to be rendered on their customer's realms, and the recent crackdown on such services in China, even were it to be enforced, has exceptions for RMT.

The source is the last Blizzard press release which still announced user numbers by continent. Unfortunately they stopped doing that a while ago, and we can only assume there have been no major shifts since then. Of course from now on that assumption will not be valid any more.

the original wow was delayed in china for quite awhile over the undead character models. For some reason the undead races really really offend the chinese government. So with the 2nd expansion being All about undead. The only surprise is that anyone is surprised. I'm sure the Chinese government feels like blizzard completely disrespected them. Thus thier current mess. I wouldn't be surprised if the government isn't trying to make an example of blizzard so the other game companies toe the line. And China isn't a democracy they don't have to even play by thier own rules if they choose not too.

You can't waltz into another country and act and act like its your own and expect everything to go as planned.

And yeah china isn't a big moneymaker now but blizzard has always thought long term. china will be the big growth market in the future.

Calm down. No really calm down. That was the part of my comment that was directed to you personally. The rest is mostly general comments about how this whole thing stinks.

I admit your reaction to this story reminded me of the hypocricy that people get enraged only after some politician/company/journalist tells them to. But I don't know you, I don't know your feelings in the past so I cannot (or care enough to) judge if you fall in that category. The post was not aimed at you.

Another great article Tobold! I'm a little surprised that people are just now hearing about this. This was posted on a few different gaming blogs and news sites a week or so ago. In fact, the start of this drama was being reported about a month ago.

At any rate, I definitely think that the subscriber numbers for non-Chinese players are much, much lower now than they were back in 2007, but it's difficult to know since Blizzard doesn't really publish that information publicly.

I guess one pseudo-benchmark would be the presence the game has in pop-culture and the overall attitude towards MMO gamers by the average person. Personally I don't see WoW as a pop-culture reference anymore and the attitude I get from people when I talk about the game has gone from wonderment/befuddlement to derision and outright condemnation. I guess it's back to the basement for us gamers now that WoW is not the "in" thing to do.

Meh, Blizzard isn't losing out that badly. Pretty much all the Chinese players who actually want to play the game have been playing on the Taiwan servers since The9's incompetence stopped them from releasing expansions for months, if ever. It's now just a case of saving face.

As far as the Chinese government's actions, yeah, it's pretty much typical of their usual arrogance and stupidity. I mean these are the guys who tried to get every PC in the country to have a government controlled back-door installed on it. Morons, don't expect much more from them.

I also don't think The9 is playing this even remotely straight. In the interim there have been rumors of them signing on with EA (Warhammer) as well as developing their own WoW ripoff.

I don't know why Western Companies are still so desperate to invest in China's consumers. Between their Government's red tape and corruption, the limited disposable income of its consumers and their flagrant disregard for copyright, is there really still much chance of a profit left?

@eric ... you better not be dissing the US ... and yes it is trues that the chinese government are isolationists and believe in communism (roflol - communism what idiots), and they violate human rights to keep their country running while they know their people hate the way their country is run and would do just about anything for a fair government.

So long as Blizzard's raking it in on WoW, it really doesn't matter. It seems like they'd have to take a pretty large hit in order for it to change anything. They're still like 5-10 times the size of the for-pay competition.

So long as they're pumping out content and keeping me entertained and making themselves a profit, I don't care what the subscriber numbers are, and I doubt I'm alone in that feeling. So long as my server's still vibrant, I don't care if there are 150 other servers or 15 other servers.

That said, does anyone have any idea what a North American/European subscriber downturn would do to places like wowhead or addons? That'd be the only reason I'd worry much about a theoretical NA-sub decline.

@ToboldSo you made a large assumption regarding the accuracy of your subscription totals. The last press release that I can recall that broke out by continent was before or perhaps at the beginning of BC wasn't it? Which would have been well before WoW climbed to 11.5 mil subscribers.

If that is true I'm not sure it is all that accurate to claim WoW is down to 5 million subscribers. Perhaps explain a bit more where your numbers came from and also explain that there is a rather large fudge factor involved in the speculation.

I know Blizzard released a press announcedment in January (or was in February) that stated they were still at 11 million subscribers, so they had definately plateued. I just don't see evidence for losing over 50% of subscribers since that time (6 months). Anecdotal evidence such as lag, guild rosters, etc seem to say that there are still a fairly high number of people playing. Of course I realise I'm looking at one single U.S. realm, but I know that most Chinese that played had moved to Taiwan based servers through other reports over the last several months, so one would think that if your report is correct that we would at least also be seeing a drop on U.S. servers. And I don't think we're seeing that.

I am not suggesting there has been a big drop in subscriptions in the US or Europe. And if WoW comes back up in China in a few weeks, Blizzard will probably be back to 10 to 11 million subscribers. But as Blizzard for years artificially inflated their "subscriber" numbers with the Chinese players (which don't actually have a subscription in the US/Euro sense), it is only fair to point out that these Chinese players currently aren't counting, because the servers are down. Whether the remaining number is 5 or 6 million isn't really relevant for that.

It is important for Blizzard to be in China because we are exceptionally brand conscious, especially those with discretionary income. Blizzard may even be willing to lose money in China for the exposure and experience.

I just started playing WoW on an EU server last week. From all I'd read recently about the problems of falling populations and not enough low-mid level players to rubn instances and what needed to be done to allow new entrants to get up to the bubble, I had sort of expected things to be quiet.

Well, if what I'm seeing is a dropping population it just shows how utterly dead every MMO I have played for the last 5 years must be. It's bloody heaving! Couldn;t even get into a low-level scenario last night because the server couldn't create enough instances for demand.

As for the Chinese story, in what way has this not been widely reported elsewhere? I've been reading about it for weeks. If it has been in the news recently, that's because it's currently "old news" and there haven't been any new developments. I'm sure when there's something to report, we'll hear it.

@ToboldI think you are missing my point. The loose figures I believe you are basing your current assumption on are going on three years old? If the press release you referred to earlier is less than that please let me know, but as far as I can recall Blizzard has not broken out by continent since before BC.

A lot has changed since before BC. Prior to BC there were a few million subscribers. At the height of BC there were somewhere in the neighborhood of 8-9 million subscribers. At least as of Jan/Feb 2009 there were 11.5 million. You can argue that Blizzard is inflating (don't they all?) but I think you have very little ground you can really base your assumptions on at this point. Too much has changed in three years. You and I have no way of knowing (in so far as I can tell) where Blizzard made up their subscribers from the point pre-BC where they had a few million to Jan/Feb 2009 where they had 11.5 million. You are making an assumption that subscriber rations continued forward linearly from three years ago but we have no way of knowing if that is true or not.

All I'm saying is I think you should more clearly indicate in your posting that the numbers are a complete asssumption and could just as easily be completely wrong. Please don't take this as the posting of a rabid Blizzard fan. I play WoW, but anyone reading my blog would know I gripe and complain about Blizzard all the time. I'm not the best "rabid fan".

Well, when Blizzard last detailed their numbers by continent, half of the 8 million subscribers were in China. In the latest official statement (see http://www.wow.com/2009/05/07/activision-conference-call-wow-still-at-11-5-million-subscriber/) they said that they have 11.5 million subscribers, and growth has been highest in China. So take a bit over half of 11.5 million, and you get 6 million Chinese subscribers. A number that is frequently quoted on all sorts of WoW blogs and forums, because it is the best guess we have. It also fits with the last statement of The9 of over 1 million concurrent users, as the industry rule of thumb is to multiply concurrent users by 5 to 10 to get subscribers.

Of course I could change "6 million" into "5 to 7 million", if that would make you feel better. But the exact number really isn't relevant at all. In any case it's roughly half of WoW's player base that is currently excluded from the game. And with Blizzard's official definition of subscriber saying that "Internet Game Room players who have accessed the game over the last thirty days are also counted as subscribers.", they officially lost those Chinese players today, WoW China being down since June 7.

Blizzard's China problem means that WoW has effectively lost four times (or more) the subscribers as the total current player base of WAR, EQ2, LOTRO, AOC, and EVE combined and this isn't a constant MMO news site top story?

okay man, not gonna argue with you about it any further. You can say whatever you want. No idea how many chinese have actually stopped playing, but we know from a host of reporting that the Taiwanese servers got a bunch of them. Shrug.

So has this materially affected RMT? The Chinese users always seem to be the ones alledged to be underlying the gold farming, so one would expect a rapid increase in the USD:Gold exchange rate as supply drops.

Is there something of relevance in this news that applies to us players in the western world?

So Blizzard didn't bribe the right military officials. Partners become competitors overnight, with official backing, and make off with all the in-country assets. That's not new in that part of the world.

So you think that Taiwan is an inseperable part of China? You communist! ;)

Again, this story is about millions of mainland Chinese players losing access to their characters. The fact that they can make a NEW account and start over at level 1 on a Taiwanese or even US server doesn't change anything. They can't MOVE their existing characters.

It changes the total number of subscribers to WoW. Whatever the exact number is right now, it is NOT 11.5 million any more, but significantly lower. Of course if you didn't care before how many millions of players WoW had, or only considered the 5 million US / EU players anyway, that doesn't change anything for you.

The more I think about it, the more I want to say, China should give up with WoW. They already block a LOT of games from the US/North American player base, from being able to play them simply because of language barriers.

They have tonnes of games they can ruin with their gold sales, and marketing schemes to gain money from selling in-game items legit means, without screwing up our games over here. I say make WoW exclude China...

Even Massively makes the same logical error, connecting the Chinese servers being down with Chinese gold farmers. That simply isn't true. The Chinese gold farmers are NOT playing on Chinese servers, in fact the Chinese servers probably have the lowest concentration of gold farmers.

Chinese gold farmers play on US and EU servers, because that is where their customers are. They aren't affected a bit by the Chinese servers being down.

Tasty, tasty schadenfreude. Bwahahahaha!Actually I have no desire to see them go down. I regularly return to WoW just to see what the new expansion or patch has to offer but I would much rather have 3 or 4 companies put out a game with around 1 million subs rather than 1 company with 5 or 10 million and everyone else struggling. That is why I am cheering for Aion right now. Competition is good.

Heh, China is not the only place where Blizzard has had to adjust the game slightly to ruling standards, the EU servers have a different game running as well.

I play on both EU and USA servers, and I can tell ya, getting a batch of dwarvern stout on the EU server is a completely different experience than on the USA server.

Here's the thing though, as long as we can all respect the fact that each culture has their own identity we would all get along fine, the problems only arise once we feel that the other is doing something that cannot be accepted in our own culture...and thinking from someone else's pov is very hard in this, because whether you like it or not, you're always a product of a specific culture, meaning that things done differently in other cultures seem odd to you.

I'm Dutch and to most cultures that means I'm very direct and confrontational. Here in Holland we called it being open and honest. Just to give an example.

Actually, haven't a large majority of the Chinese players just migrated to the Taiwanese version of the game?

They started migrating even before the game went down in China, because the Taiwanese version got Wrath of the Lich King while The9 was still having trouble getting it released due to censorship problems.

I'm not sure how low the subscription numbers have dropped, but it's extremely inaccurate to not take into account the fact that Chinese players are migrating to other versions of the game.

WowInsider reported on the initial loss of WoW by the9, the subsequent pick-up by NetEase, the delays in getting it up and running, the migration of players to Taiwan, the attempt by the Chinese government to fail censorship checks on in-game content (exposed bones and other unsavory depictions of whatever it is that gets them all bothered), the recent attainment of the Yogg-25 hard mode achievement with specific reference to the guild who rerolled on Taiwanese servers, leveled from scratch etc.

So, unless you've been totally blind and not paying attention to, well, pretty much any WoW-China rekated news, yeah I can see how this might be considered swept under the rug /sarcasm.

I'd say this is more of a blow to Blizzard than what we see on the surface. WoWs development direction has been steadily moving towards Asian style MMOs. More grindish and more PvP centric.

Both unpopular aspects in non Asian countries. China's subscription base kept rising while everywhere else kept dropping so it makes sense. The majority of their subscriber base is in China, so why not cater to them?

Now that their majority subscriber base is gone, Blizzard is left with an MMO with a failing popularity.

We can see this even now as Blizzard desperately tries to win over the remainder of the population they've neglected for so long. Game features Blizzard swore they'd never implement are now tossed into the mix. Race changes, faction changes, name changes, gender changes, selling out the WoW name on soda candy and other products, and more to come.